The pound’s downside momentum could accelerate into a collapse of the 1.3820 level in the near term, according to currency strategists at UOB Group.
24 hour perspective: “We highlighted yesterday that the bearish momentum had improved a bit and the pound could fall to 1.3890. We added that in view of the lackluster momentum, the odds of an extension to 1.3860 were not high. Our opinion was not wrong as the GBP fell to a minimum of 1.3881. From here, improved bearish momentum could lead to the pound moving below 1.3860, but the next support at 1.3820 is likely out of reach. The resistance is at 1.3925 followed by 1.3965 “.
Next 1-3 weeks: “Two days ago (Mar 3, pair at 1.3955), we indicated that the bearish momentum had more or less dissipated and the pound could trade between 1.3860 and 1.4070 for now. While there is no change in our opinion, the momentum to The short term is beginning to improve. That said, the GBP has to close below 1.3820 before a sustained decline can be expected. The odds of such a move are not high for now, but would remain intact unless the pound moves above 1.3965 in these few days. “
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